My take on the problem is:
1) Hardcore fans - It's not just that there's not enough games, but the Wii U just doesn't have that one game that gets people excited about a console. For example, Titanfall on the Xbox One, inFamous 2 on the PS4, or Watch Dogs for both consoles. Basically, lack of hype. And people like to say hype is always bad. Well, I think lack of hype is also an indicator of bad marketing.
I mean, a fucking Dynasty Warrior game or some shit like that for Zelda? How about an actual Zelda game? Bayonetta 2 isn't out yet, and I'm not sure if that's really something that gets people excited enough to buy a console.
It also doesn't help that Nintendo doesn't participate in E3 to actually show off the games for the platform and get people EXCITED. Again, people really rail against hype, but hype is an essential component of marketing in my opinion. We're talking about entertainment hardware selling for hundreds of dollars. You don't want people to be calm with their disposable income.
2) Casual fans - Three things with them. One, the fad's over. My mom isn't going to buy a Wii U like she did with the Wii (which is just collecting dust) because everyone else is.
But that's not it. I think Nintendo's really failed to push an image of the Nintendo console being the de facto console for local multiplayer. While it's definitely possible to imagine a bunch of boys or guys playing local multiplayer of a shooter while eating Doritos and chugging Mtn Dew, I feel like a game like Super Smash Bros or Mario Party is a lot flexible when it comes to who can pick up and play the game, and how fun it is to just watch other people play. They're more accessible and more about face to face social interaction (I feel like that's the case for a lot of Japanese games actually).
Finally, and this is more of an open question for me, how are they doing with kids? Are they successfully targeting them? Or are eight year olds really playing CoD these days?
Ultimately, it's all about associating the Wii U with some kind of benefit or identity.
PS4 is all about the gamers. Xbox One is all about everything in one box. Wii U is... About the gamepad? If so, that's not very appealing to both the hardcore and casual fans. Local multiplayer? Needs to be pushed more.
Personally, I would try to push for something closer to nostalgia, since it could be flexed into a different message for different target customers.
Nostalgia for the old time Nintendo fans.
Nostalgia for hardcore gamers that are much more critical about the gaming industry these days (Sony is trying to play this angle with their indie developer support).
Nostalgia for casuals who feel like children are playing more violent video games early on and there's less family activity.
